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Mr McNeany's company, Nord Anglia Education plc, and its subsidiary, the School of Finance and Management, London, were found to have unlawfully discriminated against Srian Perera, after he was unfairly dismissed as head of the SFM, a private higher education provider validated by Oxford Brookes University.

The London South tribunal singled out Mr McNeany for criticism. He told the tribunal: "Brazilian girls are lively and are perceived to be sexy; they are sparky. Swiss males are shy and need to be brought out of themselves."

The tribunal said the remarks showed a "tendency by Mr McNeany to categorise individuals by reference to racial stereotypes".

Mr McNeany told the tribunal that he was "very concerned that there were too many students of an Indian or similar background represented in the SFM student cohort". But the tribunal dismissed his argument that he wanted to engineer a more racially mixed student body because he believed that the courses would be more successful with a wider range of nationalities.

Such explanations were "implausible and fanciful, whether on academic or commercial grounds", the tribunal found.

The tribunal said Mr McNeany had "no concept" of the methods of achieving equal opportunities within Nord Anglia, and noted that the proportion of white staff almost doubled in just a few months after Nord Anglia took over the SFM in June 1998.

The tribunal detailed how, after Nord Anglia took over the school, Colin Horner, the new managing director, tried to make Mr Perera redundant. Unsuccessful redundancy procedures were dropped in favour of disciplinary procedures, and Mr Perera was summarily dismissed after a fundamentally flawed disciplinary process for alleged "gross misconduct".

The tribunal said: "We do not accept that the applicant was truly redundant" and Mr Perera's "alleged misconduct was not the genuine reason for his dismissal". It said that there was no satisfactory reason why redundancy proceedings were dropped in favour of disciplinary action, but that "the probable reason was that the outcome of those disciplinary proceedings had been preordained".

The tribunal found that the school's finance and administration manager, David Lunt, had revived old complaints from former members of staff and solicited further complaints against Mr Perera after his first disciplinary hearing, breaching procedures. The tribunal found "many procedural failures in relation to the disciplinary procedure".

The tribunal found that Mr Perera was dismissed on racial grounds. Nord Anglia was also implicated because: "We think... the applicant was disciplined and dismissed on racial grounds (by SFM), with the encouragement and at the instigation of their superiors at Nord Anglia, in particular, Mr McNeany."